O U T

I remember back in 2000 how I just watched my assets shrink on a daily basis, stuck in disbelief as an unrelenting market did permanent damage to me. It would take me more than 3 years to rebuild my business and I never forgot those lessons, until about 8 weeks ago.

I sold almost everything today and now sit with 90% cash. Whether the market rallies from here, or if I marked the bottom in stocks, that is immaterial to me. This is a mountainous fuck up on my behalf and it will take me a long, long time to not only recover from this, but regain the confidence to make it back. As the saying goes, “scared money makes no money.”

My year to date losses were stopped out at about -32%, that’s another -13% for this week alone. Clearly, the beta was too high. It’s obvious that I should have sold long ago. Yes, I should have done a million things differently. I’ve managed around each and every market crises almost without flaw, until now. We all have our comeuppance, at some time or another. Today I got mines.

As an aside, I appreciate the words of encouragement by many of you out there. Some of you have truly proven to be my friends, and I thank you for that.

I doubt I will muster the balls to invest this cash anytime soon. I am sure I can find something to chat about until I regain my composure. Perhaps I’ll just talk shit all day, poking fun at the clowns on the teevee. Or maybe I’ll attack another blog and redesign the site to look like a fucking pirate ship–steal their bounty.

With regard to stocks, I have a semi-managed growth index inside of The PPT that is vastly outperforming the “other” growth stocks. I might delve into that a little bit.

It feels good to get the monkey off my back and I look forward to witnessing the end of civilization, as we know it, in the coming days and weeks to come.

I’m sincerely sorry for this outcome….I was hoping you would get a meaningful bounce to exit on. -30% is a tough loss, but I do believe you are going to get the chance to get back in this market much lower.

But do think of this — you will sleep well tonight for the first time in a while (at least, i would imagine).

Nobody knows where the bottom is (today could be it potentially), but either way to make it back (which you will do soon enough), you need to have a clear mind and confidence. This is the first step in attaining that. Good luck Fly! I hope you continue to post and comment, because 9 times out of 10, your advice has been helpful and appreciated.

You’ll be Ok soon, Bro. I’m going on a week long drinking trip to The Riviera Maya this Tuesday, coming back the day after Cinco De Mayo. You’re welcome to come drink tequila with me and yell “Areeeba”

Eh…you’ll be back, I have no doubt. So you got a strikeout. Happens. Fact of the matter, since I’ve been coming to IBC, the homerun to strikeout ratio is insanely high. What makes it even more impressive is it was achieved with extreme transparency. Good on you, and good luck.

There’s a name I haven’t seen in a while. It’s been a rough month for a lot of people. I took a couple of weeks off during the chop, heavy cash, I’ll be back in the game eventually. Good to see you still around, hope all is well.

Also, much respect to The Fly for integrity and transparency throughout a hellish drawdown. I have the option of walking away from the game for a few weeks; people who do it for a living don’t have that luxury.

Well there is a case for a H&S on the NQ daily. I don’t believe it though. We still have the Fed at the printer. Although the sector you were betting on might be pretty hurt. I’ll just let my FEYE June 75 call become worthless. 😀

Nobody gives a shit about you and your dumb FEYE you half breed imbecile. Im sure the Stupidest Man in The Entire Fucking Galaxy has other things to do besides go on and on and on and on about his massive portfolio of 1 stock. Is there not an Imbecile convention missing its leader?

People prob need to quit saying “the low is in here for $FEYE”, unless they just hate their money. Yes it has filled the gap but the way these names are being taken to the woodshed I doubt “the low” is in. I’ve seen that statement on this board every day for weeks and it keeps going lower. Maybe if it consolidates and bases for a week or so and holds after its “earnings” the low may be in. Good luck just my thoughts

Congratulations on biting the bullet. It sucks but anyone who has invested long enough has been there. Even if they go up immediately (which is dubious), they weren’t showing good relative strength at all. Clean slate now – yeah!

You should not forget that the Fed is not out of here. Civilization is going to prove harder to end especially if the Fed stays in the system Japan-like which I suspect. Those who are shorting now, especially crowding into every nook and cranny of the high beta space, should be careful of such new “sure things”

Yellen need to show she has the whip hand, and just a slow down of the taper to 5 billion a meeting at the next meeting would cause quite a release of this compressed spring. I don’t really trade those high beta names you do/did…but I see way to much confidence now in the bears not for a speed bump to appear.

Good luck in your recovery. I’m sure you will achieve it, in an immodest time, and with an impeccable top hat.

We learn something about ourselves when we are up against the wall, and we do most certainly come out stronger.
a quitter never wins,
and a winner never quits,
we all know which one you are professor fly,
you will rise from the ashes,
like a phoenix

As they say pride cometh b4 the fall. Now that you’ve had to bite the bullet, you’ll be back, very tough mkt. been trading smaller than small lately and survived. Fly IS NOT GOD! and don’t forget it. You’ve done some great work and I’m absolutely sure we’ll see a newer and better version of “The FLY” after a some chill time. We’ll see you when your easy in your saddle again. It’ll always be here. Begging u to jump in.

Mogulhound– The Fly IS God. Don’t YOU forget it. I’m sure He appreciates your reassuring pat on the shoulder, but He doesn’t need advice, proverbs, cliches, or any assistance from newbs/trolls. He shall return 20%+ this year once again.

Hang in there, I just joined 12631 days ago and have benefited immensely already….
If for anything, think about how many young guys you have helped grow and become better traders through your blog, all while being hilarious at the same time! Even with -32% losses, you’ve got more money than I’ll likely ever see in my lifetime.

bclund had a good blog post to keep perspective. I’m sure you’ve seen it.

What no mention of your dumb stock? Fucking hell boy, go on and tell us about how the low is in or your brilliant option play. Maybe put a smiley face at the end of it because you are a grown man and thats what MEN do.

I just noticed something- it has been almost 10 minutes since you have said something profoundly stupid. My diary of Impressively-Stupid-Things-Said-By-Anonymous-Internet-Ass-Clowns needs a line entry and I know you need to blabber. Go on, go for it – we know you’ll impress.

I got stuck in the growth stocks too and am down quite a bit, but I am taking this as a learning experience (this is the first time I’ve been through something like this). Your blog is truly insightful and I appreciate the real advice and theses you provide. Keep at it, your thoughts have really inspired me. Cheers.

Head up…eyes forward. Take a deep breath and drink some scotch. Then get back to the (research) grind soon and uncover the next batch of opportunities. Winship will return. Just my $0.02. P.S. Kudos for the consistent transparency and willingness to communicate frankly about losing positions.

yeah i think i lost 4 % of my port in a day or something and i was pretty shook up. stumbled upon this and helped a lot. like wow…. life can just flip you the fuck upside down when you least expect it.

I appreciate your humor in this frustrating time for bio and momo tech stocks. Having a rules based system and sticking to it is what separates one from the pack of slaughtered retail sheep and professional mistraders alike. Also appreciate your transparency despite these losses. It takes a big person to be honest about this type of stuff which is why you see so few losers on Twitter.

What are your gains over the last 10 years? What will it be in the next 10? This is likely nothing more than a hiccup in the grand scheme of your life. Back in 2001 I sold my web hosting business when I was 28. Suddenly had my hands on 1.2 million dollars and thought I was the biggest and smartest guy on the friggin planet. Nothing could stop me. I invested most of that cash in mail.com and pets.com. LOL. Mail.com was gonna replace the friggin post office. What a moron I was. Took some time and effort to get my mind right again but stuff happens and you move on. Good luck.

Spend time with family for they are the most important thing and forget about this market and these people for at least the weekend. Take piece of mind that you been here before and survived-which you will do again.

Fly – we’ve all blown up accounts before, it took me 3 before I went to cash (slow fucking learner I am). Take some time off and formulate a new game plan, smell the roses – gotta say “fuck it – it’s only money” when this happens – you know how to make it back.

Sorry to hear this happen to you Fly, I feel personally sad because I have read your blog every day now since the old site. I recently made a lot when buying COG, and then lost all of it (no loss though) last quarter when they reported, only to find it today nearly where it was before the decline to $32. Trading is hard for us small plebs, and harder still when we see a Space Alien Magician make such losses. My sincerest apologies to you. I just hope you find a way to come back, and soon. ALL THE VERY BEST TO YOU AND YOURS.

Dr. Fly, 100% Respect from down this way. One of the things I’ve admired about you is your ability to quickly react & adjust the gameplan, sometimes within minutes of your previous one. I’ve witnessed commenters try to call you out on this, only to be met with the seemingly flippant response of “I changed my mind”. Not being stuck to something that isn’t working is easier said than done.

I look forward to following along for the next chapter. One day, while scribing from your throne, you’ll reflect back on this, most likely with a headline that begins “On The Important Matter Of….”

Fly, reading your blog over the years has provided immense insight and enjoyment.

You’re a fine investor; you will recover by recommitting to the rules that have brought about all your former successes. This is a large bump, for sure, but if you won’t climb back, what hope do we plebs with six-figure accounts have?

Look at Montauk Bill, with his terrible long JCP/short HLF trade. He sold JCP at the lows then only to have it drift even lower into oblivion. He had to cover HLF and lose hundreds of millions. Now, he’s making it back with AGN. You’ll recover too.

Few people have the honest balls to publicly discuss their losses. Much respect.

hat tip sir. i talk shit to you a lot and I also give props. I try to stay real, and no matter the person on this site, I never wish financial losses on fellow iBC traders. Clearly the weight on your mind was too much. You made the right call. Congrats on coming out of the financial closet.

everyone loves you, fly. That’s gotta be worth something. Good Luck. I went long DATA yesterday and I’m barely underwater GILD. Vey small. If they both go to zero I don’t really care. Thats how much risk I am willing to take.

It’s more than possible to end the year up from there. It’s clear you can do it too. Just take a breather for as long as you need. One day you will be shaving in front of the shower mirror and you will stop shaving and slap the whipped cream off your face and realise you need to go to Teavana, or some other such outlet I’ve never been to, a Yankee Candle “store.”

Fly, with last year’s 70% and this year’s -32% you’re at the equivalent of making about 16% last year, which is not too shabby in itself. Get back in the trading turret, son, you’ve recovered from worse before.

i felt the need here to crawl out of lurk mode and thank you, sir, for this blog. i started trading a couple of years ago and have been reading your blog for the better part of that time. its helped me understand our market and how to stomach the game. your humor has been reconfirming on the worst and best days (no homo). so take some time off if you need to, get some fresh air.. but come back weilding a katana! looking forward to it.

Our greatest financial asset is our own skills (motherhood statement but true for many). The Fly has many skills: look at this website and how entertaining it is, as investor look at how nimble The Fly has been (not just now?? but in 2009), and then that jesus-talent in written English (no offense intended), and all the other stuff we can only imagine.

Been a trader over 13 years and started reading you maybe for the last 5-6 months. The best site i have where i am always curious when the next post is. Who knows if you can recover your losses or not, but definitely you have been an inspiration . Feel sorry for the loss, but also feel relieved at least it is finally done and out. Appreciate all the posts and the environment you created.

I have not business being in these stocks, but I felt it appropriate to dip my toes into a little bit of FEYE, YELP & DATA a few minutes after this capitulation post was made. I will certainly pull these early next week if the bloodbath continues. Good luck, all.

Fly, I can honestly say I learn something from every single post you write.
I think too many people are quick to blame this drop on Ukraine, or some Fed speech, and think it’s temporary. I see more fundamental issues at work. Guess we’ll find out.

It’s good to know that even traders like Fly can experience the kind of losses I thought only I had (like in VHC…although ironically, it was actually up today.)
This is a tough tape to trade, long or short. I appreciate your honesty in posting your thoughts here so publicly. This too shall pass.

There sure are a lot of anonymous douche bags who post vile trash here and seem to feed off others misfortunes. Gotta love the internets. Glad bannings were reinstated.

FEYE was my biggest loser in many years and I got out 20% higher from today’s close. My total losses were 23% for that one stock. The bottom line is momentum trading is dead right now and stocks aren’t responding at key support levels or to earnings. This is a warning sign.

Make like a Quaker except you have dough.
You just arrived in America and the world-well at least New York- is your Oyster.What would you do.First hook
up with friends and drink apple cider till
you’re drunk.Then give the wife the time
of her life.Then appreciate all the love around you.Then you’ll get an idea and
you will be back.

I’ve been at this since I began trading commodities in Chicago in 1965. I’ve never seen anything like “OUT”. No traders, and very few human beings, are capable of that kind of honesty. Best wishes for speedy recovery.

1. Denial
Against the better judgment of everyone around us, we can’t help but entertain fantasies of things somehow working out. We see hidden glimmers of hope buried in clear indications that … it’s over !

2. Anger
Anger can manifest in many different ways … anger at God or the universe … anger at people or situations … anger that your “stocks” have lost their MoMo and anger at other people who don’t agree or stand with your anger !

3. Bargaining
Bargaining often goes hand in hand with denial. Bargaining can be looking for any possible way to make the “position” work. Many people bargain with The Powers That Be, promising to be a better “trader” … if only your “stocks” will come back. During this stage, you may take a new interest in astrology, tarot cards or any type of voodoo that will forecast your recovery !

4. Depression
Depression, like anger, also surfaces in many different forms, for example feeling tired all the time … trouble sleeping or sleeping too much … loss of appetite or overeating … increase in drug or alcohol use and, hopelessness ! Hopelessness makes it feel like you will never move on and that nothing will ever work out for you in the future !

5. Acceptance
Finally, this is the phase in which we are able to make peace with the “stock loss”. It doesn’t always come on suddenly; it often happens gradually, little bit by little bit, interspersed with some of the other phases. Acceptance doesn’t always involve harmony and flowers – there is almost certain to be lingering sadness and regrets. Acceptance entails making peace with the “stock loss” … letting go of the “stock loss” and slowly moving forward with your “trading career”. Sometimes it feels like this phase will never come, which usually means you’re still struggling in an earlier phase.

—–

Knowing your phases of grief can help normalize your “blow-up” experience. It’s also important to know that there are no time limits and no rushing the process. Grieving is like digestion: there is nothing you can do to hurry it along. It takes time and the only thing you can do is try to get through it.

But take heart in the fact that this, like everything else, will eventually pass !!!

Greetings Dr. Fly, I read all the posts above and the amount of love and respect the people have for you is amazing. I have been reading you since broker A and B days. One thing is clear you are a very talented writer as well as trader. There is no way you will be beaten by the recent events. Once you feel your head is clear, you will be back twice as strong. That is a fact not an opinion. In the unlikely event you chose not to trade, you have a future as an author. I really appreciate what you have done for all of the followers of this site. You have put together an amazing collection of talented traders/writers/teachers here. Also the PPT algorithms are pure genius. There is no way you will be beaten by this. Stay well my friend.

Good grief, man. Pull it together. You are far from being ‘done,’ but you need to keep fixing.

Bless you, first step taken. You cut your losers. Yes, all of them are going higher by 100%. On Monday. Deal with it.

Now clear your head. Turn the whole site over to minions. Go read a Clavell book or two. Start with Shogun or Taipan, and definitely not King Rat or Whirlwind. Don’t come back for at least 7days, 10days is best. Don’t even look at a chart.

Next, get back on that horse. You are only done if you continue to do nothing. Get back to what you do best and make money starting in May. Then in Q2, then in Q3. Forget about Q1, it sucks and you need to answer those questions later. Don’t make it Q1 and Q2 that you need to answer questions about.

I’ve been reading your blog since the original design. In all the ensuing years I have never read anyone who was as openly honest about their performance in the markets, be it up or down. For that alone I trust your idea and respect your thoughts. Plus, you are the best writer bar none.
While you are getting your mojo back, remember the Yoda quote, “Long the war is, only by surviving it will you prevail”.

nice move getting out fly, fyi i think writing about your positions could play a role in making you believe in them more than you maybe should. I had a boss who was an asshole and thought the best way to manage people was to be a devils advocate and question any risk a trader put on, thus forcing traders to constantly defend their positions to him. in a sense it made me more committed to the positions than i should have been b.c i loved to prove him wrong

its time to make it back Fly. But first take a few weeks to create.a business plan and vow not to take the drawdown you did. Vow to close account if more than 15% drawdown. You need that as a business rule.

It happened so quickly, and across every single holding. That’s what made it special. Plus, to your earlier point, rarely does a bounce not occur in such situations.

It was basically a 4-sigma event, you played the odds, and the outlier played out.

I have made riskier bets on worse odds and pretty much always had them turn out ok. This is a lesson that if you play long enough, those long-shot odds eventual get you. And it only takes once. (for most people, not money managers).

As any serious long term trader knows capital preservation is as important as trading. Its a tough emotional period but is critical for long term success. Rip the bandaid off, take some time to detach then get back to what made you successful. If managed improperly one bad trade can destroy a lifetime of good work.

Nymph’s Shanghai Copper Bubble maybe finally popping? Since 2009 we have had huge global liquidity from Central Banks and the Chinese stockpiling commodities in bonded warehouses and taking loans from the huge amount of Hot Money/liquidity that the central banks provided. In late Feb, we had a bond default threat in China. The default on a bond payment by China’s Chaori Solar signalled a reassessment of credit risk in a market where before even high-yielding debt had been seen as carrying an implicit state guarantee on it. Which stoked fears in the metals markets that the default was a sign of tighter credit to come for users of metals and for financiers that have used the metal as collateral for borrowing. At that point, the China Govt came in and bought up about 200,000 tons of Copper to stable it. But, with QE tapering, Abe on hold until Sept and Draghi just all talk and no action, the market is coming to grips that loans from the bonded warehouses may not be renewed and financing deals may start to unravel pretty fast. Plus, at 1755 on the SPX we hit the last major Fibo level until the 2200ish area. Perfect Storm …but I am a Bear.

Huggie I’ve said it for 2 months I don’t know of a single economist calling for a recession. That’s odd. Maybe everyone is right for first time in history. For now though weakness is still contained. I don’t know how but I’m up 16% thus far after epiic yr last yr. I’m playing small ball now. Btw you were long ewz going into today right? That actually underperformed spy for what it’s worth

If you’re up 16%, bully for you. I’m down 1/2% for the year. I’ve had a good year but my system led me into a bad trade in EWY and FXI a couple of months ago.

EWZ underperformed today, but from my entry point I’m up substantially, and I believe it is one of the best performing country ETFs this year.

Anyway, i’m not calling for a recession….I am expecting more or less a natural contraction in multiples in a low-growth environment with a less friendly fed. -15% from here wouldn’t mean a recession, just a normalization.

But great for you if you are up 15%….thats impressive. I got headfaked on the china breakout earlier this year and am lucky to be back to nearly breakeven.

BY the way, my EWZ is fully hedged at 45 on a cost neutral basis through May, so i have little if any downside over the next month. Currently also short about 20% of my portfolio value in ES futures at the moment. So 100% invested in EWZ, hedged at $45, with 20% short on the ES (on leverage obvs.).

I plan to ramp up dramatically my ES short exposure next week if the econ reports come in negative, in particular the jobs report.

Hilarious stuff. And real as it gets. I’m a very recent reader. I began to think you were short these high flyers. Especially when you closed WDAY and picked DATA. Been there done it. Can’t stomach the volatility. Never could.

Write a book about what you know…the stock market and being a stock trader.

Funny and brutally honest. What you have seen and learned in your career. All the ups and downs. People in the trade you have known. Rules, commandments, techniques. Señor Tropicana, Horatio Clawhammer, Plutonium Petey. Fuckery and trickery and robbery. The nature of the market today.

Pour it all out. Read or re-read ‘Reminiscences of a Stock Operator’ and use it as a guide. It doesn’t have to be ‘War and Peace’. Write your own reminiscences as a stock trader, updated for the 21st century.

The new investor is hungry for that book right now. With your gift as a writer, you are in the catbird seat.

a. nasdaq at a 15 yr double top
b. banks are loaded up on japan, hey, it worked for usa, Europe, and when abe went all in, u got an immediate 40% in six months, problem, imho, zero followers to japan
c. Russian fuckery, well 6 mini fuckeries in last 4-5 years did bupkas, yet, these guys are major world players with money all over the place, so risk this risk that is getting hammered
c. housing negative
d. we ran 60 months almost exactly from low to high in usa
e. tightening free money only a tad
f. the foolery came with commodity run ups from October lows that everyone yelled, here comes global growth
g. all in all question is is it leveraged to the hilt at this point
h. overall companies are same place last 3 years, good earnings, growth ehhh
j. my personal savings grace was hmc in jan., bought a smide on the 21st low, and next day it didn’t react right and it’s own personal sell off started
my account has swung from plus 15 to zero in last 4-6 months….thus my room for error was decreasing each month….and since i’m no longer a full timer….after a decade….cabin fever crazeee…when I was in…I was nervous and watched every tick for 3-5 days running between vxx and solars

in conclusion if you follow pomo schedule imho it has even gotten to the point that schedule is timed to juice the market to perfection….now that they have less money, it was mid and backloaded in april…..we shall see

Everyone’s gets his ass kicked by mother market at some time or another. I think senor Fly did the right thing to cut his losses even at -30%. Its still very do-able to come back. Especially the Fly. It will take time of course but I have no doubt it can be done !

When you lever up, pile into one sector, which was widely held by momentum traders and hedge funds…what do you expect to happen to your portfolio? Incredibly levered high beta is the definition of high risk high reward. If you make that bet long enough you’re bound to blow up eventually, especially if your risk management is based off your belief that “you always win.” But you’ll bounce back Fly, just don’t let these series of events scar you enough so you miss out on the upside.